Rent Restrictions (Temporary Provisions) Bill, 1981: Second Stage.

Minister of State at the Department of the Environment (Mr. F. O'Brien)

I move: "That the Bill be now read a Second Time."

The primary purpose of the Bill is to provide, in line with the announcement already made by the Government, a measure of protection for tenants who have been affected by the recent Supreme Court judgment on the constitutionality of parts of the Rent Restrictions Act, 1960. It is an emergency measure designed to deal with an immediate and acute social problem within the confines set by the Supreme Court decision. At the outset, I should say that I do not see the Bill as a final answer to the problems of the rent controlled sector. The Bill is a temporary measure which is to run for a period of six months from the day that it is passed. I intend to introduce a more substantive measure in due course to deal with the problems of this area. For the moment we are faced with the need to deal with particular and immediate problems arising out of the Supreme Court's decision.

On 29 June last the Supreme Court gave a judgment which declared unconstitutional Parts II and IV of the Rent Restrictions Act, 1960. These parts control rents and restrict the landlord's right to recover possession of controlled dwellings. They are at the very core of the Rent Restrictions Code and provide the basic protection for an estimated 30,000 tenants of controlled dwellings. In essence the Supreme Court held that rent control as set out in Part II of the 1960 Act was contrary to the provisions of Article 40.3 of the Constitution. This Article requires the State in its laws "to protect from unjust attack and, in the case of injustice done, vindicate the life, person, good name and property rights of every citizen".

Part II of the 1960 Act was adjudged an unjust attack on these rights in that it restricted the rights of one group of citizens for the benefit of another, without compensation, with no process of review, without regard to the financial circumstances of the parties involved, with no limit on the period of restriction and allowing for no modification of the operation of the restriction. This, the Supreme Court considered both arbitrary and unfair and in consequence an unjust attack on property rights.

Part IV of the 1980 Act essentially fell because it was considered to be so closely connected with the rent control provisions as to have no independent life of its own. Once Part II was declared unconstitutional it followed that Part IV should also be unconstitutional. Apart from their comments on the Rent Restrictions Acts themselves the Supreme Court also referred to the need for new legislation which could be expected to provide for the determination of fair rents, for a degree of security of tenure and for other relevant social and economic factors.

The effect of the decision is that these tenants occupying dwellings at relatively low rents will, in the absence of action by the Oireachtas, be faced with major increases in rents and in certain cases with demands from the landlord for possession of the dwelling. Many of the tenants involved are elderly or otherwise among the poorer sections of the community and need additional legislative protection. This was alluded to in the Supreme Court's judgment itself which spoke of a statutory void to deal with which it assumed new legislation would be speedily enacted. In this context the Supreme Court recommended that the courts in dealing with applications for a decree for possession arising out of the judgment should, in the reasonable expectation of new legislation, where justice so warrants, either adjourn the case or grant a decree for possession with such stays as appear proper in the circumstances.

The Bill effectively puts the Supreme Court's recommendation on a statutory footing. The Bill before the House is designed to ensure that for six months tenants will be secure in the possession of their dwellings and not have to pay increases in their rents. The Bill achieves this object by reintroducing the restrictions on the landlord's right to recover possession of a dwelling which were contained in section 29 of the 1960 Act, and by making rent increases notified after 18 April 1980, the date of the High Court decision on the case, irrecoverable in law. The effect of the two sections will be to restore to tenants a substantial level of protection.

The six-month period of the operation of this Bill will enable the Government to consider what future action in this area is called for and to prepare appropriate legislation. In doing so, regard must be had to the terms of and reasoning behind the Supreme Court's decision. In connection with future action, I think it appropriate at this point to refer to our Programme for Government in which we have put forward proposals on the rented sector of housing. We have undertaken to ensure fixity of tenure for existing tenants in rent controlled accommodation and to provide a scheme to subsidise rents where they are beyond the means of existing tenants.

In the wider context, it is the Government's intention to set up a mechanism to fix rents which will be fair to both landlord and tenant, to establish a tenant's right to a written lease and to provide a tax allowance for tenants of private rented accommodation. While these are matters which do not arise out of this Bill, they are the considerations which will direct future Government action in this area. Our immediate concern is with a major social problem which requires immediate action. I accordingly commend the Bill to the House.

Mr. Raphael Burke

I should like to start by congratulating the Minister of State on his appointment to the Department of the Environment. I wish him well. His experience as a member of a local authority and the way he represented the people of Dublin in his term as Lord Mayor augur well for his future behaviour in the Department of the Environment. On a very personal basis I wish Deputy O'Brien well as Minister of State at the Department of the Environment.

He is very fortunate to have the advice of such a fine body of civil servants as are in the Department of the Environment. As Minister for the Environment until Tuesday of last week, I can say that in the eight months period I was there I never failed to be amazed at the courtesy, advice and loyalty of the civil service. They were superb. I should like to take this opportunity to put on the record of the House my appreciation of the civil service in general.

I welcome this Bill. It was prepared by our Government in anticipation of the Supreme Court decision which was handed down eventually on 29 June. The decision of the court, which declared that Parts II and IV of the Rent Restrictions Act, 1960, are unconstitutional, has the potential of being the single biggest element of social distress ever arising from a court decision. The Bill attempts to tackle this problem, albeit by way merely of a holding operation for six months.

I should like to expand on why I consider that decision to have this potential for causing distress. The Rent Restrictions Act, 1960 is entitled:

An Act to make provision for restricting the increase of rent and the recovery of possession of premises in certain cases and to provide for other matters connected therewith.

The control effected by the Act is said, in the judgment of the Supreme Court, to extend to between 45,000 and 50,000 dwellings. In the estimation of the Minister of State and of the Department, the number is 30,000. This represents a considerable gap between the two figures and it is something that I should like the Minister of State to refer to when he is replying.

The problem arising from the court decision is that the vast majority of those dwellings affected by the decision are occupied by elderly people who are on fixed incomes, mainly pensions. These people will not be in a position to meet the vastly increased rents likely to be demanded by the landlords. In addition, these elderly people are the least well equipped, either mentally or legally, to handle the distress caused by the threat of eviction from their homes. We must remember that the dwellings in question are mainly pre-1940 dwellings. It is a source of major concern in this House that so many people in these circumstances should find themselves facing eviction or, if not, the payment of vastly increased rents. I regret deeply that the court in its wisdom did not not accept the case of the Attorney General. He made the case that the legislation which the Supreme Court was deciding on should be examined for invalidity under Article 43 of the Constitution. Section 2 of that article provides for the regulation and delimitation of property rights in accordance with the principles of social justice and the exigencies of the common good. Section 1º of Article 43 reads:

The State acknowledges that man, in virtue of his rational being, had the natural right, antecedent to positive law, to the private ownership of external goods.

Section 2º of that Article reads:

The State accordingly guarantees to pass no law attempting to abolish the right of private ownership or the general right to transfer, bequeath, and inherit property.

Section 2. 1º reads:

The State recognises, however, that the exercise of the rights mentioned in the foregoing provisions of this Article ought, in civil society, to be regulated by the principles of social justice.

The same Article at 2º provides that:

The State, accordingly, may as occasion requires delimit by law the exercise of the said rights with a view to reconciling their exercise with the exigencies of the common good.

The Attorney General said that this impugned legislation is justified by section 2º of Article 43 and accordingly no question of non-compliance with that Article arises. He said that the power of regulation or of dealing with the rights of private property is vested in the Oireachtas by reason of Article 6 of the Constitution and that it is to be presumed that, in exercising that power in relation to Article 43, the Oireachtas in acting intra vires and with due regard to the direct principles of social justice as set out in Article 45 which are not cognisable by any court, and that the court's power to condemn this legislation under Article 43 cannot arise unless it is shown that it is not permitted by Article 43.2º. The Attorney General said that what the Oireachtas had done is permitted by Article 43.2º and that no question of injustice requiring State action under that provision can arise. He went on to say that Part II of the Act must be tested for constitutional validity and that it cannot be held to have lost that validity by the mere passage of time or by changes in economic circumstances, which is central to the whole judgment, and that even if the State had any duty to review rent control, it did so in 1967 and again in 1971.

I am sorry that the Supreme Court did not agree with that submission but by rejecting the Attorney General's case and declaring both Parts II and IV of the Act to be unconstitutional, the court in its judgment, at least recognised the very special feature of this case and the particular social problems that it would cause.

I should like to refer to the observations made by the Supreme Court in its judgment. The judges said that in the particular instance of this case, because of the special features of it and because of the consequences involved, the court considered that some further observations were called for. They observed that the removal from the affected tenants of the degree of security of possession and rent control which they have enjoyed up to now would leave a statutory void. We are attempting today, albeit on a very temporary basis to fill that void. The court assumed that the situation created would receive immediate attention and that the relevant legislation could be expected to provide for the determination of fair rents, for a degree of security of tenure and for other relevant social and economic factors.

That section of the court's judgment vindicates totally the decision of the previous Government to introduce a Bill. That decision was announced on 29 June. It also vindicates the decision of this Government to bring this Bill before the House. As the Minister of State has said, this temporary measure awaits the consideration of both the implication of the judgment and the long-term measures that are to be taken.

I would ask the Minister to inform the House as to the type of measures he intends taking. He refers to the Gaiety Theatre document in which he says is an undertaking to ensure fixity of tenure for tenants in rent-controlled accommodation. This party will be seeking and demanding that such measures will be provided because this whole question is basic to the social structure of so many of our cities and towns. We will be fighting hard for the implementation of these measures when the new Bill is before us.

It would be nonsensical to provide a section which would guarantee fixity of tenure without introducing also a section which would provide for a scheme of fair and reasonable rents and which would provide a scheme to subsidise rents in the event of the less well off not being able to meet their rent demands.

Would the Minister of State spell out exactly what he has in mind for the legislation which will be brought in, rather than merely referring to the Gaiety Theatre document when he says it will provide a scheme to subsidise rents beyond the means of existing tenants? How does he see this operating? Does he intend that the supplementary welfare allowance scheme will be used or is there to be a special fund set up? How is this to be financed? It is difficult to see, although I admit that at the time of drafting this legislation we in Government had in mind using the supplementary welfare allowance scheme as a system of subsidisation of the excessive rents which were envisaged. The Minister should spell this out, not just for the benefit of the House but for the 45,000 to 50,000 people involved, who are suffering mental torture arising from the Supreme Court decision. Many of them are old people who are not used to dealing with the courts and the laws of the land and with this threat of eviction.

The Minister of State referred to a mechanism to fix rents which would be fair both to the landlord and to the tenant. I compliment the Minister on the idea of the mechanism. It is something we will be seeking in the further Bill which the Minister's Government will have to introduce. We will be looking for uncomplicated but effective machinery, uncomplicated to the extent that it will not create mental or legal difficulties for the tenants; uncomplicated in the sense that the tenant who has a disagreement with the landlord, or vice versa, can have it settled satisfactorily in a non-legalistic way to bring to a conclusion any disagreements between tenants and landlords. I envisage that this mechanism would be extended, not only to deal with the problems of rent but also to deal with the problems of repairs to property and any other matters which cause difficulties between the landlord and tenant. The whole relationship between the landlord and tenant should be directed by this mechanism to be set up. Would the Minister of State expand on the section of his speech which referred to the mechanism? He also referred to the Gaiety Theatre document and the tax allowance for tenants of privately rented accommodation. I have a question about that on the Order Paper for later on. I will wait for the reply from the Minister for Finance to that question.

There is also a reference in the Gaiety Theatre document to a fair rents tribunal. Would the Minister of State give the details so far worked out on this fair rents tribunal? When does he envisage it being brought into operation? Is it intended to use it for tenants caught up by this court decision? Does he intend to extend the operation of the tribunal to previously decontrolled tenancies?

In the forthcoming legislation we will be seeking a proper system of registration for all landlords. This register will be of major benefit to the community and to tenants for the future in their properties. Whether the register will be run at a national or local level is a matter for the Minister to decide but it must be fully comprehensive and list all landlords in the country. With regard to the Bill itself, section 4 refers to the increase in rent being unenforceable for six months. I admit this was a problem when I was involved in the drafting of the legislation as to how it was going to operate. The fact that it is unenforceable is one thing but it does not say in the legislation that rents cannot be increased. It will mean that the follow-up legislation will have to come much faster than the six months envisaged in the legislation before us today. I hope the Minister of State will expand on the operation of section 4, from the point of view of both the landlord and the tenant.

Have the Government given consideration to the submission that is reported to have been made by a spokesman on behalf of the landlords who, I understand, has requested the President to refuse to sign this Bill, pending either a meeting of the Council of State or its referral to the Supreme Court as to its constitutionality? It would be in the interests of the tenants, those people I referred to earlier, who are suffering such distress at this stage because this legislation has not yet been passed and because all the publicity that the spokesman on behalf of the landlords has received with regard to his submission to the President, if the Minister of State spelled out the course of action which his Government intend taking if the President decides to send this to the Supreme Court and if the Supreme Court gives an immediate ruling that the Bill is unconstitutional. I am not a lawyer but I do not think the Bill is unconstitutional. I think the Supreme Court have requested Parliament to fill the statutory void that is left as a result of the decision of declaring Parts II and IV unconstitutional. I hope the Minister of State will spell out for tenants who are suffering mental torture at present not knowing if they are going to be evicted or what exorbitant rents they are going to have to pay as a result of the Supreme Court decision, what immediate course of action this Government have in mind to protect this less well-off section of our society which is not in a position to defend itself from so many of our landlords.

Once again, I welcome the Bill. I am glad that the Government followed the line being taken by the previous administration. What we have before us today is the Fianna Fail Government's Bill which was announced on 29 June, in response to the Supreme Court decision. I ask the Minister of State, in reply, to respond to the questions which I have put to him.

Mr. Sherlock

I welcome the Bill, which is very important at this time, in view of the terrible plight of a great number of people who a while ago had security under the controlled dwellings section of the Act. They now find they have no security.

The Supreme Court heard the case in December and it is regrettable that a draft Bill should be only a holding action now to ensure the rights of poor tenants. The various amendments to the Acts throughout the years are most incomprehensible. They have whittled away the rights of tenants under the Landlord and Tenant Acts. Ground has been covered but any new law should give protection to all tenants, to ensure that it is not unconstitutional. One of the biggest problems with which one is confronted nowadays is tenants whose landlords continue to have access to courts and eventually get a court order. One is not always happy that the presentation of such cases in court is satisfactory. From my experience of these cases, a lot is left to be desired. The new law should provide security for all tenants.

The most urgent need is the Fair Rents Tribunal. It has been stated, and I agree, that it should be simple and easy for people, if necessary, to bring their cases before the tribunal. We should have on that tribunal democratic organisations such as trade unions and the tenants organisations. The tribunal should have power to fix and enforce fair rents, grant reasonable security of tenure and arbitrate on landlord and tenant disputes on the application of either party. Finally, any new Act must make illegal eviction a criminal offence.

There has been reference to subsidising by way of a supplementary welfare allowance in the interim. The House is aware that the amount which can be paid is very limited indeed. This is a totally unsatisfactory method of dealing with cases of people who cannot afford to pay and in the case of persons on fixed incomes, are depending on an allowance from the Department of Social Welfare. The mechanism for the local authority health board to pay a supplementary welfare allowance to assist in the payment of rent is something which needs to be clarified.

I ask that the points which I have made be taken into consideration and hope that, with the passing of the Bill, tenants will have security and fair rents. This is a big problem at present.

Mr. Mervyn Taylor

I have a few comments to make on the Bill now before the House. The fact that this situation has arisen at all highlights the need for a constant review of legislation which is on the Statute Book. Legislation many years old, and in many cases out of date, obsolete and inadequate for the needs of modern society, is allowed to remain there for want of attention by the Oireachtas, year after year, in many cases running into decades. That phenomenon is not confined to the field of rent restriction. It has been brought to the fore because of the action taken by a person or group of persons in bringing the matter before the Supreme Court. Had that action not been taken, the status quo no doubt could very well have continued on for many decades more. In my view, successive Governments should not wait the promptings of private individuals to bring matters of this nature to the fore. The Government of the day should constantly review legislation on its own account and implement the necessary modernisation in the field of law reform.

A Minister of State has now been appointed who is responsible for law reform. I hope and expect that the very many fields urgently requiring the attention of that Department will come before the Oireachtas in the coming sessions.

The field of rent restriction, of course, has been notorious for its neglect by the Oireachtas. The House will recall that the first of the Acts was passed in 1923, the Increase of Rent Act, 1923. The matter lay virtually unattended until the Rent Act of 1946. After that it lay virtually dormant, apart from minor adjustments, until the 1960 Act and then lay dormant until the Supreme Court decision of 1981. That should not have been permitted to happen by successive Governments.

I want now to draw attention to the fact that very many of the dwellings under Rent Act legislation are very old. Very many are in need of quite extensive modernisation and repair. I have grave doubts whether it may be possible for those dwellings to be maintained as usable and habitable dwellings so long as they continue to be within the private sector. The question of making funds available for many of these houses to be compulsorily acquired by the local authorities may have to be looked at in many cases. Where very heavy expenditure on repairs would be necessary, the only adequate way of having those buildings preserved for some decades ahead would be to make funds available, have them taken over by the local authorities, put into repair and maintained henceforth as local authority dwellings.

So far as the Bill is concerned, I would ask the Minister of State to consider a couple of points in his summing up. The latter part of section 4 deals with the agreement that may have been reached between the landlord and tenant before or after the passing of the Act. It deals first with the question of an agreement reached after 18 April 1980 to date. It says "or agreed to by the tenant on or after that date and before such passing shall not be enforceable while this Act is in force". I take it from that that if an agreement between the landlord and tenant is reached after the passing of the Act such an agreement would be fully binding and enforceable. I am a little concerned about that because the position will still be rather uncertain.

Landlords and tenants, even after this Bill is passed, will not be sure what the eventual outcome will be, what the new legislation will provide, what security of tenure they will have or what rents they will be required to pay. Under the threat of that uncertainty the tenants may enter into an agreement with the landlord which, when the legislation comes into force, they might have reason to regret. Therefore they should not be bound by an agreement entered into under the threat of that uncertainty. The Minister of State might consider an amendment which would ensure that an agreement entered into and falling within that category would give the tenant the option to void that agreement and to rely, if he wishes, on such rights as he might be granted under new permanent legislation.

Agreements entered into before the passing of the Act are deemed not to be enforceable while the Act is in force. I do not know if that means that when the six month period runs out such an agreement would become enforceable. The wording of the Bill seems to provide a stay on that agreement for the six month period. Some clarification is required because if an agreement is entered into before this Bill is passed it is very likely that is was entered into under severe pressure and threat of a removal of security of tenure and could be balanced against the tenant. An amendment would be required to provide that, even after the expiration of the six month period an agreement between landlord and tenant entered into before the passing of this Bill would be voidable at his option. Section 6 (1)——

An Ceann Comhairle

The Deputy can raise these matters on Committee Stage.

Mr. Mervyn Taylor

Am I not in order?

An Ceann Comhairle

The Deputy is not out of order, but his remarks are more pertinent to Committee Stage when he can speak as often and as long as he likes when we are discussing the relevant sections. On Second Stage we deal with the general principles of the Bill.

Mr. Mervyn Taylor

I was not aware of that procedure. I thought I could raise any matter affecting the Bill on Second Stage.

An Ceann Comhairle

The general principles of a Bill are discussed on Second Stage.

Mr. Mervyn Taylor

I will speak further on Committee Stage.

Mr. McCreevy

I want to congratulate the Minister of State on his appointment. I agree with some of the sentiments expressed by the last speaker. In my few years in this House I have noticed that a number of legislative measures, fire brigade actions, were introduced. Because of the nature of these measures it is not always possible for Members of this House to find all the faults in such legislation and it is only when they are pointed out in our courts that we have to bring in amending legislation.

I welcome this Bill because it will rectify a situation which needs to be remedied. If this legislation had not been introduced the tenants of those dwellings would find themselves in a very difficult situation. As has been pointed out, the people who occupy most of these dwellings pay very low rent and are in the lower income bracket. Because of the Supreme Court decision their security of tenure and the amount of rent to be paid can now be called into question.

I note that the new Government propose in their manifesto to look at the whole question of rents. When they do I suggest that they look at the whole area of landlord and tenant legislation. The last Government brought in a number of Landlord and Tenant Acts. The whole field of landlord and tenant legislation is so complex that I suggest this Government introduce a Consolidation Bill. This area is so complicated at present that even for solicitors it can be a minefield.

This Bill is a temporary measure. Since April 1980 it was expected that the Supreme Court would take the same line as that taken in the High Court. I am surprised the then Fianna Fáil Government did not anticipate that decision. I hope this House will not continue introducing temporary measures every six months. I understand that the Rent Restrictions Acts were introduced as temporary measures, and if we continue introducing temporary measures we will not have very good law. I hope in six months time a new Bill will be introduced which will set out the situation as it should be.

In my constituency there is very little rent restriction but I am amazed that nobody ever thought of bringing this matter before the High Court. I am not suprised that rent restrictions were found to be unconstitutional. Landlords are getting out of the business of providing rented accommodation. It may be popular always to speak on behalf of the tenants because there are more tenants than landlords and more votes can thus be gained. Legislation on this subject has now made it quite impossible for landlords to get tenants out of houses and to do many other things and there has been a lessening of interest in the provision of rented accommodation. The law has gone from the extreme of being always on the side of the landlords to being excessively on the side of tenants. It may be politically popular to speak about protecting the rights of tenants but we have now reached a situation where people are not prepared to let out their property for rent because the law favours the tenant to such a great extent.

If the new Government intend to provide a mechanism for the fixing of rents they should examine the whole question and should not be obsessed with the protection of the tenant to the detriment of the rights of the landlords. The Supreme Court decision clearly illustrates that under the Constitution landlords also have rights. If tenants are over-protected landlords will not be interested in the provision of rented accommodation. The Bill before us is a temporary measure to cover the situation arising while a major Bill is being drafted. I hope that the second Bill will embody the principles I have outlined.

Under section 4 I am not quite clear if after the passing of this Bill a new tenancy will be valid. My reading of it is that this will be the case but I should like the point clarified. I hope that the legislation to be introduced within six months will be comprehensive because we cannot put off this problem indefinitely. It will be difficult to frame a Bill to take account of the judgment of the Supreme Court and to protect the rights of tenants. I do not envy the task of the Minister and his officials in drafting such a Bill. The Supreme Court judgment clearly spells out the lines over which we cannot pass. If we do not devise a system which will be equitable to tenants while taking account of the court's decision it is likely that the landlords will take action again.

I welcome the Bill and hope it will have a speedy passage.

Minister for Industry, Commerce and Tourism (Mr. Kelly)

I agree very much with some of the points made by Deputy McCreevy. It is not the first time that I have found myself in agreement with him. I hope he will not be offended when I say that I consider him to be a member of our party in exile — an extra-territorial member of Fine Gael. Even before his most celebrated strictures on the way the country was being led two or three months ago I had the feeling that he was on the wrong side. However, I have had that feeling before about other people and have been subsequently disappointed.

Mr. Power

It did not stop the Deputy from dangling a few carrots.

Mr. Kelly

I do not think I have ever tried to suborn an individual member of Fianna Fáil. I would not be against trying to suborn the whole lot of them if they tidied themselves up and adjusted some of their ways of looking at the world. I have not ever made midnight telephone calls to members of that party trying to——

An Leas-Cheann Comhairle

The Minister should confine himself to the legislation before the House.

Mr. Kelly

Deputy Power does not really know how to react to anything flattering said about his colleague.

An Leas-Cheann Comhairle

The Minister should direct his remarks to the Chair.

Mr. Kelly

I was taken with some of the things Deputy McCreevy said. It may not be the most appropriate context in which to say it but he is quite right that one of the reasons why housing is so desperately short and dear is that, so far from its being the preserve of the free-wheeling capitalist who can do what he likes — although that is certainly true to a limited extent — the more substantial and important truth is that there are not enough capitalists in the business. The reason housing is so scarce and dear is the ordinary law of supply and demand. If it were more attractive for people to invest in property there would be a reduction over a period of time in the cost of rented accommodation and a reduction in the burden on the State of having to take up the slack in housing people who cannot afford privately supplied accommodation.

I am very far from excusing all the sins of private landlords who exploit tenants and I hope the coming legislation will apply some restraints on landlords of all kinds of accommodation and make sure that they give their tenants a decent deal. There is a great deal to be said for Deputy McCreevy's point. It may not be popular because it conflicts with this or that ideology but experience here will go a great distance to support it.

I agree with Deputy McCreevy's point about section 4 because it is not entirely clear to me either. The drafting of the section might be improved because it is not clear whether the notified increase which the section mentions is never to be enforceable or whether its recovery is merely temporarily postponed until the Act goes out of force. If that is Deputy McCreevy's point of view, I share it. The section could be more clearly expressed.

I agree even more strongly with his third point where he expressed doubts about whether six months is an adequate period for the currency of this legislation. It is not simply a matter of drafting a substantive permanent measure; it will have to pass through both these Houses in that period. It will be a long and difficult Bill which will not flash through on the nod. Only an optimist would suggest that it would pass through this House in less than several weeks, whatever about the Seanad. On the whole it might have been more sensible to provide a slightly longer life for this Bill when it becomes law than six months. That is something which the Minister and the Department might look at. There is no constitutional infirmity in the Bill before us. We have a duty under Article 15 not to enact anything which is repugnant to the Constitution, and that imposes on the House a duty, which is not just a nominal duty, to take seriously the question of whether or not what we are doing is constitutionally offensive. I think it said in the papers that one or more of the plaintiffs in this case proposed to challenge the entire Act on the grounds that even this temporary measure would breach constitutional rights. That imposes on us a duty to pause over that question and consider what we are at.

As it is a strictly temporary measure and as it is the consequence of what the Supreme Court called a statutory void having been torn in the legal system by its own judgment, the Oireachtas must be entitled to a certain period of grace to try to put things right. It could be said that it is the duty of the Oireachtas to give itself a breathing space not just for neglect but so as to give itself space within which a reasonable measure can be devised. The Supreme Court in its judgment more or less anticipated this point being raised both in an earlier part of its judgment and more particularly in the concluding page or so. The court went out of its way to envisage healing legislation which it hoped would be speedily enacted. The court said that such legislation may be expected to provide for the determination of fair rents. The courts consist of experienced lawyers who know that any question of providing a statutory scheme for such a subjective and disputable matter as what is a fair rent is something which cannot be done overnight or without long thought and careful drafting and without taking into account the representations of interested parties and associations.

It is reasonable for us to impute to the Supreme Court an understanding of the difficulties which the enactment of such a Bill will place in the way of the Minister's Department, the Parliamentary draftsman and the staff of this House. I did not hear the Minister's speech so I do not know whether this point was made for the last Government had this measure reached the House in time, but the court did another unusual thing in the concluding part of its judgment where it more or less pointed out to inferior courts who might administer the rent restrictions legislation that they ought to apply a stay of execution for the purpose of enabling persons' rights to be adjusted. They believed that the inferior courts should not attach to an order for possession a date which would frustrate the healing effect of whatever this House or the other House might enact later this year or early in 1982.

The point that this Bill is built around is one which the Supreme Court specifically envisaged and expressed. The Supreme Court also said, on page 28 of the typed transcript, in condemning the existing legislation referred to as being an element in which there was no mitigation of the rigours of the old law, that because the legislation was not limited in duration the court implicitly recognised that an Act which is limited in duration might have a different constitutional status than one which is expressed to be permanent. The court said that the old law was not associated with a temporary or emergency situation. Implicitly, had it been associated with a temporary situation it might have been entitled to more respect or indulgence from a constitutional aspect than a permanent law. On these grounds I am satisfied that we are doing nothing wrong in enacting this law. I have expressed misgivings as to whether six months will be long enough but the Bill as it stands is not objectionable and I hope it will turn out to be so.

Mr. G. Bermingham

I congratulate the Minister of State on his appointment. I served alongside him in Dublin Corporation and I am aware that he is well fitted to take charge of housing.

This has been referred to as fire brigade legislation. For many years the whole area of rent control has been seen as being unsatisfactory. It is universally recognised as an area of anomalies that have sometimes been bizarre. But no action was taken. As Deputy McCreevy feels, the reason no action was taken is that this is an area of political sensivity and there is a danger that any action would stand on the toes of one or other of the interested groups involved, more specifically the tenants. That hesitancy to introduce legislation can be seen in other areas which are sources of continuing political controversy. Action was only forthcoming in some of these areas when the High Court on appeal to the Supreme Court gave a ruling that demanded action from this House. It is sad that areas that are in need of political judgment should in the first instance be decided on by the courts and that only when the courts have expressed a view does the Oireachtas respond because it has an obligation at that stage. If one looks at the situation prior to the challenge to the constitutionality of the code, the crying need for legislative action was obvious. The whole question of what dwellings are controlled and what dwellings are uncontrolled is extremely curious. There is no logical reason for drawing an arbitrary distinction, for saying that pre-1941 buildings should be regarded as being different from post-1941 buildings. In this day and age any regard to the question of rateable valuation must be extremely suspect.

There is the quite extraordinary situation that someone who is fortunate enough to find themselves in a dwelling that was controlled enjoyed a most elaborate protection while the unfortunate across the road was effectively and substantially at the whim of the landlord. The divergence in their positions had nothing whatever to do with their economic strength, their ability to negotiate for themselves or any other factors one might feel reasonably justified such a divergence. That divergence related solely to historical factors. That was a situation which, it seemed to me, had long cried out for reform. Yet nothing happened.

Deputy McCreevy commented that he many years ago had pondered the thought: why does somebody not challenge this legislation? But it is very widely recognised that there was a feeling abroad that the rent restrictions code was constitutionally infirm and might not stand up to challenge. Notwithstanding that feeling there was no eagerness on the part of the Legislature to intervene and to respond to what was clearly an area of injustice.

The situation obtaining is that the Supreme Court has spoken for us and obliged this House and the Government to act. In that sense I congratulate the Government for the speed with which they have moved. In saying that I am not unaware that the party opposite were also anxious to move at the appropriate time. But I share the hesitancy of the Minister for Industry, Commerce and Tourism as to whether six months will be adequate for all of this. I am perfectly satisfied that if the plantiffs in the original action were to proceed to challenge this Bill they would be told by the Supreme Court that the Bill, then an Act, was entirely in accordance with the judgment of the Supreme Court and in fact was responding to a very broad, judicial hint from the Supreme Court. I am quite satisfied that that is what they would be told in relation to this six months Bill.

But if it became necessary in six months' time to introduce another six months Bill, a challenge at that stage would stand on substantially firmer ground. I think the courts would certainly look with considerable disfavour on a situation in which a series of allegedly temporary measures appeared to be about to be introduced and, if asked to condemn, might very well feel that they had no option but to uphold their authority and condemn any second temporary measure. For that reason I join the Minister in urging the Minister of State to consider whether at this stage it might not be wiser to extend the period of six months to 12 months. I feel very strongly that any challenge to this Bill, designed and stated to be a temporary measure, would certainly fail. I feel equally strongly that the attitude of the Supreme Court might well be that the Oireachtas is, in a sense, given one bite of the cherry, that certainly they can have one stay to get their house in order but, if they start looking for more than that, there might indeed be very little sympathy.

Another matter that concerns me somewhat is an implication that I deduce from the long title of the Bill, which reads:

An Act to make temporary provision, in consequence of the decision of the Supreme Court declaring certain provisions of the Rent Restrictions Act, 1960, to be invalid having regard to the provisions of the Constitution, for a measure of protection, in conformity with that decision and with the provisions of the Constitution and, in particular, Article 40.3 and Article 43 thereof, for persons deprived of the protection theretofore provided by that enactment in order to enable legislation to be prepared and to be initiated in, considered and, if thought proper, enacted by the Oireachtas to provide due safeguards for such persons in accordance with the exigencies of the common good.

It seems to me that there is there an implication that the substantive legislation to be brought into force will continue in effect the contrast between those people who were controlled and those who previously were not controlled, that even when the substantive legislation is brought into force those who prior to the court case had the good fortune to be in controlled accommodation will continue to enjoy rights greater that those who are not in controlled accommodation. If I am correct about that it worries me, because I see absolutely no logic in that situation. As I said earlier, there never was any logical distinction between the occupiers of dwellings that were controlled and those that were not. If the original line, when drawn, was illogical, it would seem to me to be quite wrong that the illogical division should for any reason be carried over into the new legislation. I would ask the Minister of State when replying to indicate whether I am being unduly alarmist about that or whether it would be the intention that people who fortuitously found themselves in controlled dwellings would continue to enjoy rights substantially greater than the people across the road.

I do not want to go into the details of the Bill at this stage but a number of speakers have commented on section 4. Again, like the Minister, I am somewhat uncertain as to its interpretation. There is one other matter that concerns me. The section refers to 18 April which if my recollection is correct, was the date of the judgment in the High Court. While that is in a sense a logical cut-off point, it should be borne in mind that the initiation of these proceedings received very substantial publicity, that there was quite a well-orchestrated publicity campaign attended on the progress of this case through the courts, that many of the people in controlled accommodation substantially before 18 April would have been alarmed and worried that their position was under threat. Certainly I heard of instances of landlords approaching their tenants on the basis: All right, you are in a strong position today, but you know there is this court case coming up. Once the court case is decided, the boot will be on the other foot. On the strength of that anticipation landlords managed to negotiate for themselves terms that certainly would not have been available had the litigation not been before the courts. If that is the case then it would seem to me there would be some merit in considering the possibility of backdating from 18 April, in fact going back to the date on which the proceedings were launched in the Supreme Court with all their attendant publicity.

I do not want to detain the House or to repeat what has been said by other speakers but I share Deputy McCreevy's view that there is need for an overhaul of the entire landlord and tenant code. The last Dáil looked at the area of commerical lettings and the relationship between the business landlord and business tenant. I believe there is a similar obligation on us to carry out an examination of the area of private accommodation. That is an area that has been substantially neglected, apparently partly because of the belief that the Rent Restrictions Acts were dying out and that in every year there were fewer and fewer dwellings to be controlled and that if one turned one's back on the problem it was one that would eventually go away. In fact the anomalies and injustices that occurred over the last few years have been such as to reduce substantially the amount of rented accommodation available in this city. I venture to suggest they were also in part responsible for much of the decline and blight we have seen in the inner city.

In those circumstances, and against a background of neglect, I believe the time is now ripe, if not substantially overdue for a very comprehensive examination of the whole relationship of landlord and tenant. Even at this stage I venture to suggest that, if distinctions are to be drawn between various tenants and the degrees of rights that will attach to them, an attempt—and I do not doubt for one moment that it would be a very difficult one—should be made to make that distinction on the basis of their financial strength, their ability to bargain, their ability to look after themselves and not on the basis of the entirely fortuitous circumstances that they happen to be controlled or uncontrolled under legislation that was subsequently found to be unconstitutional.

The point has already been made that, while the fears and apprehension that now exist among tenants in response to the Supreme Court decision are being taken account of by this Bill, for many years we had the situation of real injustice being done to landlords by the operations of the Rent Restrictions Act. While the popular image of the landlord is some kind of latter-day Victorian gentleman, eager to toss everybody on to the street, I am sure every Member in the House can produce cases of landlords in very poor circumstances unable to derive any income because their property was controlled. Some of them were in the situation where the controlled dwelling was occupied by people who were substantially better off than the landlord who was living in straitened circumstances. I believe, whatever the political risks involved, that there is an obligation to bring a degree of fresh thinking to this whole area, to start off, at the very least, by saying that the question of where the line is to be drawn between the rights of the landlord and the tenant must be looked at in the light of the existing economic situation in 1981 and should not be unduly governed by historical factors which have long outlived their usefulness. I warmly welcome this Bill but I again ask the Minister of State to consider if six months will be long enough.

Minister of State at the Department of Education (Mr. Keating)

I would like to make four very brief points. I have every confidence that the Bill before the House today is the precursor of comprehensive and fundamental reforms in landlord and tenant legislation and that it heralds a new era of legislative, economic and social change for people presently in the category of tenant or landlord in this area. The reforms which the Government have agreed to undertake will be undertaken. They are long overdue because we have had virtual stagnation in terms of progress in this area.

The Bill seeks to provide us with a breathing space whereby the Government will be able to undertake changes which will carry out the full implications of the Supreme Court decision. I am slightly uneasy about aspects of that general approach. There is, apparently, an increasing reliance on the courts to do our thinking for us in certain regards when it is clear that legislative proposals and legislative changes are necessary. It is an unhappy thing when the courts are asked to do more things than they have been designed for and act as an instrument for bringing about change in social or political policies. That is not primarily the role of the courts and it would be undesirable if too much dependence were to be thrust on the courts for insisting on this House and Governments of the day bringing in enlightened reforms where they are necessary and clearly evident, as they have been in this regard.

My second area of unease is that there need have been no undue delay about bringing in the comprehensive measures which are necessary in the light of the Supreme Court decision because the previous Government had ample notice that it was very likely that the decision might go the way it did. They should have, if they had been engaged in genuine concern in this area, arranged for sufficient preparatory work to have been done, which would have ensured that only the minimum holding measure, if any, would have been necessary. I raised this matter in the House about 12 months ago and was given an assurance that legislation was in draft form. The context of the discussion would give anybody the belief that such legislation that was being drafted was designed to carry out the implications of the court decision. Apparently, it was simply no more than a stopgap to allow for full examination of the court's decision and make the necessary alterations, improvements and amendments arising therefrom. Obviously the court decision needs that kind of examination. I suggest, however, that the work of preparing for the eventuality which was likely should have been much further advanced than it appears to have been and the spirit of the Supreme Court decision, which is that certain Acts presently in our statute are unconstitutional — that spirit cannot be honoured for a period of time. There is a degree of tension between the decision of the court and the capacity of any Government to respond overnight to such a directive. That is undesirable.

I am not at all impressed by the expressed concern of Deputy Burke when he spoke about the kind of standards and criteria he will be seeking from legislation to be introduced by the Government, in terms of comprehensive and fundamental reform in this area. I would like to remind him of the many days in this House over the last four years when we attempted to convince the then Government not only that reform was needed, but that promises undertaken over four years ago for implementation were not implemented. I specifically refer to the one relating to a tribunal to oversee rent and possibly other conditions, which was the basis of a very specific letter in June 1977 to the National Flat Dwellers Association. That pledge has never been implemented. It will be implemented in the next four years because we have given our word.

I, like many other Deputies in the House, have on my files many letters from the former chairman of the National Flatdwellers Association, Mr. John Power, recently deceased. His death, which was caused by a drowning accident in the last few weeks, is a singular loss not just to the tenants of the country but to all of us who rely to a significant degree on voluntary contributions from interested groups in our society in urging us to greater efforts to bring about change in our laws and our attitudes. His efforts should not go unrewarded. I believe I speak for every Member of the House when I say we are deeply grateful to him as, I am sure, are the 300,000 to 400,000 tenants of rented accommodation for the trojan work he did while he was chairman of the Flatdwellers Association. I would like to think that his dedication and his work in that area will help us to be more dedicated in the future to reform in this area than we have been. His passing is deeply regretted.

The reforms now necessary should be undertaken on the simple principle of justice for tenants and for landlords. The private rented sector is very valuable from the point of view of housing, one that has not been given adequate consideration, adequate resources and adequate policy attention. In that category large numbers of people are being housed with little consideration for necessary reforms in regard to maintenance of standards for both landlords and tenants. There has not been access to impartial arbitration in times of dispute. It has been a very haphazard situation heretofore.

I should like to think that the Bill before us will act as a spur to our imagination and to our efforts in the challenge that lies ahead. I hope it will also serve as a token that we will begin to do the things that we know to be necessary in the matter of landlord and tenant reform. If at times we lag in our efforts in this area we should refer to our files which contain letters in John Power's handwriting and see there evidence of his concern for the people he represented. It should represent a catalyst to all of us so that we will not break our word to introduce reforms in this vital area of social legislation.

Mr. Shatter

I should like to make some brief comments on this legislation. In the past few years we have had the phenomenon of this House failing to come to terms with or recognise the need for legislation of a social nature. We have had a considerable number of judgments delivered by the courts which in effect forced the legislators to come to terms with the realities of life in the 20th century. They have forced legislators to enact laws. Here today we have legislation in this area of rent restriction which has been forced on the Legislature by the courts.

I find the Bill disappointing. It was informative to hear the former Minister for the Environment say that what we have is essentially a Fianna Fáil Bill. That is indicative of a total legislative abdication of responsibility of that party. It is clear that the former Minister had no notion, and his party have no notion, of the type of legislation they should have been thinking about to deal with this whole problem of landlords and tenants, and in particular to try to provide the necessary protection required for both tenants and landlords.

This area is so complex that a Bill to deal with it could not be drafted in a week or two. Such a Bill must be comprehensive in the long term. The ultimate Bill will have to deal with the whole area of landlord and tenant law and not simply distinguish between tenants and landlords depending on the dates when houses were leased, when families moved in or when landlords acquired the premises. There is need for comprehensive legislation, but the Bill we have before us, prepared by the previous Government, is a clear indication of the total inability of that Government to deal with this area, of their total failure to introduce comprehensive law reform.

As a lawyer, I was not surprised that the Supreme Court confirmed the High Court decision. That was done approximately a year-and-a-half after the High Court judgment was delivered. That means there was a year-and-a-half in which to prepare comprehensive legislation, but no such legislation was prepared. I welcome this Bill in so far as to some extent, it will give peace of mind to people who feel threatened in their homes and feel in danger of being put out of their homes. I welcome it in so far as it will provide temporary peace of mind, but the problem now is the same problem that arises on every occasion when the courts essentially have to step into the legislative area, when they have to turn to the Oireachtas and say: "What is on the Statute Book is out of date and discriminatory."

The problem is that every constitutional judgment of this nature creates uncertainty and stress and renders it impossible for people to become aware of their rights, so they cannot make long term plans for their well being. This Bill may relieve anxiety temporarily, but until we have comprehensive legislation to deal with the whole of this area that anxiety will continue to exist. I share the worry of previous speakers in relation to this. There has been a suggestion from people outside the House that this Bill, too, might be unconstitutional. The Minister, Deputy Kelly, dealt with that aspect. It appears the Supreme Court envisaged enactment by the Oireachtas of legislation to fill the gap, but I am not clear that the gap which the Supreme Court envisaged being filled is being filled by this Bill which maintains the status quo in order to give the House an opportunity to bring in comprehensive legislation to determine in a fair way how rents and other obligations between landlords and tenants should be dealt with.

I do not believe the Supreme Court necessarily envisaged the type of Bill we have in front of us. Nevertheless, I think the courts would uphold this Bill as a temporary measure. I share the concern that if it does not become possible to enact comprehensive legislation within six months — I do not think it is possible to enact such legislation in such a period because it will require debate of a very involved nature — there is doubt as to how the courts would deal with another Bill of a temporary nature. Therefore, I would ask the Minister seriously to consider extending the life of this Bill to perhaps nine months or 12 months, something more than the six months, because we are talking about the House sitting for a period later in July, then going into summer recess and coming back in October. Therefore, the type of Bill required could not be prepared and enacted in six months. Therefore, I seriously ask the Minister to have another look at the time schedule set down in the Bill.

I would also like to voice concern about section 4 — of course this will be dealt with in more detail on Committee Stage — but I would make the general point that the section is ambiguous not merely in the manner referred to by previous speakers in the matter of regulating agreements signed, but as the section is framed it is totally unclear as to whether it is intended merely to postpone the effects of these agreements, whether it is intended to render them void, whether after the six months period a landlord or a tenant will be able to rely on the agreements to enforce rights. It is the most ambiguous section in the Bill. I believe it would create problems and could give rise to litigation. We should, as far as possible, try to remove some of the ambiguity and uncertainty that exist in the present situation. I ask the Minister, before the Committee Stage, to look at that section of the Bill to see what we can do to provide the necessary amendments before the Bill becomes law.

There is not much else I wish to say at this stage about the Bill except to come back to what Deputy Keating was saying. I find it ironic to hear Members on the opposite side laying down stipulations and criteria as to what they want to see in whatever Bill is to be produced ultimately. That is a cynical and hypocritical political exercise when Members opposite had a four-year period to introduce comprehensive reforming legislation in this area and it appears that the whole of that four years was devoted to preparing a Bill of approximately five sections which is before us today and which must be passed, due to the court decision, to provide temporary relief. I find it ironic to have Members opposite laying down criteria now. If they were so sure as to what was required in these areas, if they knew the detailed provisions that should be enacted, why were they not enacted at some time in the past four years?

Minister of State at the Department of the Environment (Mr. F. O'Brien)

First, I should like to thank Deputy Burke and other Members for their congratulations and good wishes to me in my new office. I am sure I shall find my new responsibilities in the Department of the Environment both interesting and challenging. This is the first piece of legislation I am putting through the House and I should again like to thank all the Deputies who spoke for their very informative and constructive contributions.

Deputy Burke raised a number of points, as did other Deputies, which I will deal with. In my introductory speech I mentioned the figure of 30,000 tenants who could be affected in the figure of 45,000 to 50,000. We have no set pattern to determine the actual number. We can only make estimates and my Department believe 30,000 is reasonably accurate. The 1971 census showed that there were 65,000 unfurnished lettings. A large number of those were controlled but since 1971 there has been a decline in this type of accommodation. A large number of people in controlled accommodation have bought as landlords decided to sell. Also, under the 1960 Rent Act there were changes; a number of dwellings were demolished. We believe a reasonable figure would be 30,000. If it is more than that we shall deal with it on the basis of it being more than 30,000. In my view it is about 30,000.

Deputy Burke raised the matter of future policy. As I indicated in introducing the Bill we shall bring in substantive legislation which will be comprehensive and will deal with all aspects of lettings. First, we must consider the Supreme Court judgment which raises fundamental questions which will have a bearing on any future action we take. Our programme for Government lays down very clearly a number of measures which we feel are vital in the interests of landlords and tenants. I spoke of these in my opening remarks and I do not propose to dwell unduly on them again. The action we are taking in regard to controlled dwellings in this Bill and in the announcement by the Minister last week is entirely consistent with what our programme of government proposed. In it we undertook that in the event of the rent restriction code being found unconstitutional the Government would introduce legislation to provide fixity of tenure for existing tenants and would provide rent subsidies for existing tenants who might be faced with having to pay rents beyond their means. This Bill is a first step in the course of action we propose.

The Government are very concerned that legislation would be brought in quickly. A number of Deputies raised the matter of the six months and wondered if we would get this comprehensive legislation through in six months. We shall certainly try and I shall push the Department to ensure that the legislation is before the House as soon as possible. Deputies asked if we should extend the period. It is our advice and our view that the term should not at this stage be extended beyond six months. We think that is reasonable and on the basis of people questioning the constitutionality of it I believe we are well advised to stay within the six months' limit. A number of Deputies raised this point, Deputy Birmingham, Deputy Shatter and others saying they feared we would not have legislation through in six months. We shall work on it in the coming months and it is my wish to have it before the House and I shall be asking the House to deal with it speedily.

The question of constitutionality was again raised. The view of the Government is that the action we are taking is correct and is constitutional. The Supreme Court in its judgment adverted to the statutory void to which the terms of the judgment would give rise. Indeed the judgment went further and spoke of what amounts to a moratorium by the courts on ejectment proceedings in expectation of a legislative response to the judgment. It is clear that such pernament legislation would take some time to produce and enact and this is precisely the reason why the Supreme Court thought it proper to advise lower courts that in the expectation of new substantive legislation, cases brought before the courts should be adjourned or a stay of execution put on any orders granted. In effect what the present Bill does is to put the recommendation of the Supreme Court on a statutory footing. The Bill is founded on important principles enshrined in the Constitution as is amply demonstrated by the Long Title of the Bill. Paragraph (2) of the Explanatory Memorandum circulated with the Bill goes into the constitutional principles in some detail.

Dáil Éireann debate -
Thursday, 9 Jul 1981